When Amazon launched its marketplace in Australia, it was a limited offering. The mega-retailer didn’t offer its priority delivery subscription service Amazon Prime, nor its store-within-a-store service Fulfilment by Amazon (FBA). The company also denied Australians access to Amazon.com, which operates from the US.
Soft launches like this incomplete ‘rolling’ launch are fraught with danger, because a brand only gets one chance to make a first impression. Consumers can be lost forever because of an underwhelming first offering and Amazon not only risked short-term damage to its sales, but longer term damage to its brand image. Winning a customer is always easier than winning back a customer.
A moment of hope
The public’s lukewarm reception to Amazon’s Australian launch brought hope to retailers who had been told by the usual harbingers of doom that Amazon would end their businesses. The day after the launch, the earth still turned on its axis and the sun rose in the east.
It seems competitive edge is still possible for big and small businesses that are committed to lifting their service standards, updating their business models, reviewing their pricing policies and establishing and sustaining strong relationships with existing and past customers.
Plug the leak
The prospect of bricks-and-mortar and online businesses both losing market share to new interlopers like Amazon, Aldi, Costco and numerous fast-fashion outlets is really the consequence of poor and impersonal service at retail level.
The number of consumers who are frustrated and intolerant with sloppy retail experiences has increased substantially during the past decade, and Australian entities are no longer protected from Amazon and other giants by geographical isolation.
With the advent of online channels and digital marketing, convenience and access have both boomed. Product range and delivery are no longer hindered by geographical factors and now seem almost unlimited, extending far beyond what traditional retailers can offer.
Furthermore, a slow uptake of e-commerce by long established and recognised traders has lowered the barriers and accelerated the entry of global disruptors.
Correspondingly, and as a consequence of managerial inaction, price has eclipsed branding for the first time in two decades as the third most important criterion in purchase decision making.
It seems everything has changed, necessitating a total audit of marketing, advertising, merchandising, promotions, sales, service, operations, inventory, pricing and staffing.
First thing’s first
Without question, a primary cause of why retailers are leaking revenue and customers to new, mostly global entrants is the disturbingly regular instances of negative shopping experiences.
To reiterate a quote popular in business development workshops, “We have met the enemy and they are us.”
Attacking, competing with and beating Amazon cannot be achieved by focusing on where Amazon is strongest – lower prices, a huge range, house-branded products, priority servicing and delivery, prompt customer responses and global product access.
Instead, the most immediate and scalable opportunity for traditional retailers is personalised customer service. Online interactions lack the emotion that flows from a personalised encounter. Digital customer service can feel transactional in nature and is not an easy medium for building relationships, stimulating loyalty and encouraging repeat business because everything focused on now.
A proper focus on service
Sadly, opportunities are often lost because of service myopia. A narrow view upon convenience and immediacy leads to perfunctory exchanges bereft of even the most popular elements of service excellence, such as customer empathy and after sales service.
Managing expectations is a fundamental pillar of attracting consumer interest, visits, sales and, ultimately, repeat business. Generating a sense of intrigue is fulfilling to prospective customers and therefore satisfying for businesses.
Consider this final thought: businesses can survive and even thrive in the presence of Amazon and other global retailers. Those that will do best are the ones that can lift their sights, standards and disciplines to the benefit of all. Do that and the customers will keep coming.